Have money, will migrate

Updated: 2013-03-21 15:10

By Lv Chang and Zhang Chunyan (China Daily)

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Another study, conducted a few years ago, revealed that 80 percent of China's wealth is held by 20 percent of the population.

"The private economy contributes more than 60 percent of China's GDP and it absorbs a majority of employees," says Wang Huiyao, director of the Center for China and Globalization. "So if private business owners emigrate with their capital, it would mean less investment in the domestic market, and fewer jobs would be created."

Investment immigration also hits less developed areas harder than big cities because economies in those areas are mainly bolstered by the private sector, he says.

The Economic Observer, a weekly Chinese newspaper, finds it ironic that after three decades of rising prosperity, those who have benefited most from the country's economic growth are leaving, taking money and skills with them.

"It is not reasonable, nor in the national interest of any country, that individuals who have benefited from the favorable overall conditions to create wealth in a country should then take the fruits of these benefits abroad rather than aiding the country in which that wealth was created," says John Ross, a senior fellow at Chongyang Institute for Financial Studies of Renmin University of China and former director of economic and business policy for the mayor of London.

In an attempt to prevent a "wealth drain", he suggests following the US's example.

He says the US introduced an "exit tax" in June 2008 for American citizens with a net worth of more than $2 million.

"China is a developing country, without the same accumulated stock of wealth as the US, and therefore withdrawals of wealth are more damaging," Ross says.

CCG director Wang says the solution is to develop more sustained economic development and improve the quality of life.

"China is facing the dual challenge of modernization and globalization," Wang says. "It is impossible in a short time to eliminate the various problems and contradictions in the economic and social development.

"Besides, it is human nature to pursue a more stable and comfortable life. Only by making the country more attractive to its talent can it slow down the trend."

But Oliver Barron, head of NSBO's Beijing branch, a UK-based investment bank with offices in Beijing, says: "Gone are the days when the main focus in China is domestic wealth creation.

"Chinese investors have matured and are now more focused on wealth preservation, which is a natural step in China's evolution and one which should be embraced."

Contact the writers at lvchang@chinadaily.com.cn and zhangchunyan@chinadaily.com.cn

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